| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | C$-0.3B | C$-1.3B to C$1.2B | C$0.71B | C$-0.3B | C$-0.1B |
| Imports - M/M | 2.3% | 1.8% | 2.8% | ||
| Imports - Y/Y | 6.4% | 2.9% | |||
| Exports - M/M | 4.9% | 2.2% | 1.9% | ||
| Exports - Y/Y | 8.7% | 1.6% |
Highlights
Canada unexpectedly recorded a merchandise trade surplus in December of C$708 million following an upwardly revised C$986 million (previously C$323 million) deficit in November and compared to a -C$0.3 billion consensus in the Econoday survey of forecasters.
Exports jumped 4.9 percent (the third consecutively monthly rise), after a 1.9 percent rise in November, while imports saw a 2.3 percent increase building on a 1.8 percent rise in November. This is the first trade surplus since February 2024.
Exports soared by 8.7 percent compared to December 2023, while imports rose by 6.4 percent.
The value of the loonie depreciated significantly against the greenback in December, fueled by concerns of a looming trade war with the United States. Statcan said that when expressed in U.S. dollars, Canadian merchandise exports increased 3 percent from November to December, while imports saw just a 0.4 percent uptick.
The monthly rise in exports was broad-based, with eight of the 11 product categories rising. Exports excluding energy products increased 3.6 percent. In real terms, total exports rose 2.6 percent.
The largest biggest drivers of the monthly increase in imports were consumer goods (+4.7 percent), metal and non-metallic mineral products (+8.7 percent) and industrial machinery, equipment and parts (+5 percent). In real terms, total imports rose 0.2 percent in December.
On a quarterly basis, exports jumped 4.3 percent in the fourth quarter, the biggest increase since Q2 of 2022. The exports of metal and non-metallic mineral products (+12.9 percent) and energy products (+4 percent) were the largest contributors to the increase.
Imports rose 2.8 percent in the fourth quarter, after a 0.2 percent contraction in the third quarter. There were gains in all import categories.
In 2024, total merchandise exports were up 1 percent from 2023, while imports rose 1.9 percent. As a result, the merchandise trade deficit widened from -C$610 million in 2023 to -C$7.2 billion in 2024.
Exports jumped 4.9 percent (the third consecutively monthly rise), after a 1.9 percent rise in November, while imports saw a 2.3 percent increase building on a 1.8 percent rise in November. This is the first trade surplus since February 2024.
Exports soared by 8.7 percent compared to December 2023, while imports rose by 6.4 percent.
The value of the loonie depreciated significantly against the greenback in December, fueled by concerns of a looming trade war with the United States. Statcan said that when expressed in U.S. dollars, Canadian merchandise exports increased 3 percent from November to December, while imports saw just a 0.4 percent uptick.
The monthly rise in exports was broad-based, with eight of the 11 product categories rising. Exports excluding energy products increased 3.6 percent. In real terms, total exports rose 2.6 percent.
The largest biggest drivers of the monthly increase in imports were consumer goods (+4.7 percent), metal and non-metallic mineral products (+8.7 percent) and industrial machinery, equipment and parts (+5 percent). In real terms, total imports rose 0.2 percent in December.
On a quarterly basis, exports jumped 4.3 percent in the fourth quarter, the biggest increase since Q2 of 2022. The exports of metal and non-metallic mineral products (+12.9 percent) and energy products (+4 percent) were the largest contributors to the increase.
Imports rose 2.8 percent in the fourth quarter, after a 0.2 percent contraction in the third quarter. There were gains in all import categories.
In 2024, total merchandise exports were up 1 percent from 2023, while imports rose 1.9 percent. As a result, the merchandise trade deficit widened from -C$610 million in 2023 to -C$7.2 billion in 2024.
Market Consensus Before Announcement
Forecasters expect the trade balance to remain in deficit by C$0.3 billion, unchanged from the prior month.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Nominal data are supplied with regards to principal trading partners and product classification.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. This is particularly true for Canada which relies on exports and particularly those to the U.S. for growth. It should be noted that this report focuses solely on goods trade - it leaves services trade for the quarterly national accounts and balance of payments reports.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
